A party’s citizenship is a critical issue when federal jurisdiction is being claimed on the basis of diversity. While it is well-settled that, for example, a corporation is a citizen of both the state of its incorporation and the state in which it has its principal place of business, and that limited partnerships are citizens of every state in which each partner is a citizen, the law was not settled concerning national banks.
Congress attempted to provide the answer by statute, but the language of 28 U.S.C. § 1348 (national banks deemed citizens of the state “in which they are respectively located”) has caused a split in the circuits.
In Wachovia Bank, N.A. v. Schmidt, No. 04-1186 (U.S. Jan. 17, 2006), the Court held that Congress intended that a national bank be a citizen only of the state in which its main branch, as specified in the charter, is located. The Court rejected the Fourth Circuit’s position that national banks be deemed citizens of each state in which they have any branch.
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